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Weekly EURUSD Bulls Need Follow-through

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Market Overview: EURUSD Forex

The weekly EURUSD bulls need follow-through buying following the breakout above the trading range. They want a strong breakout followed by a measured move based on the height of the trading range. The bears want a failed breakout followed by a retest of the middle of the trading range.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly - Some FT Buying, Bulls Need to Do More, Weekly EURUSD Bulls Need Follow-through
  • This week’s candlestick on the weekly EURUSD Forex chart was an inside bull doji closing in its upper half.
  • Last week, we said the market may still be in the sideways to up phase. Traders would see if the bulls could create follow-through buying, or if the market would start to stall and trade back into the trading range instead.
  • The bulls got some follow-through buying albeit not strong yet.
  • Recently, they got a breakout above the top of the trading range (Aug/Sep and July highs).
  • They want a strong breakout followed by a measured move based on the height of the trading range. That would take the market to the 2021 high area.
  • They must create sustained follow-through buying to increase the odds of a measured move-up.
  • They want any pullback to be weak and sideways (overlapping candlesticks, doji(s), bull bars, long tails below candlesticks).
  • The bears see the current move as a large 2-legged bull leg and a buy vacuum test of the trading range high.
  • They want a failed breakout followed by a retest of the middle of the trading range.
  • They must create strong bear bars to show they are back in control.
  • The move up (since the February 18 low) is in a tight bull channel with big bull bars which means strong bulls.
  • Most breakouts from trading ranges fail. Markets have inertia and tend to continue what they have been doing.
  • That means trading ranges (and trends) are resistant to change and tend to continue.
  • However, if the bulls can create strong follow-through buying, the odds of a successful breakout and a measured move will increase.
  • For now, traders want to see if the bulls can create more follow-through buying.
  • Or will the market start to stall and trade back into the trading range in the next few weeks instead?
  • For now, the market may still be in the sideways to up phase.

The Daily EURUSD chart

Eurusd Daily - Some Ft Buying, Bulls Need to Do More
  • The EURUSD traded sideways to up for the week.
  • Last week, we said the move was strong enough for traders to expect at least a small sideways to up leg to retest the current leg extreme high (now Apr 11 high) after a pullback.
  • The bulls got a large second leg sideways to up in the last 3 weeks.
  • They want a strong breakout above the trading range followed by a measured move based on the height of the trading range.
  • That would take the market to near the 2021 high area.
  • They see the last 5 days forming a small bull flag and want a strong breakout above.
  • They must create sustained follow-through buying to increase the odds of a measured move up.
  • If there is a pullback, they want it to be weak and sideways (overlapping candlesticks, doji(s), prominent tails below candlesticks).
  • If there is a deeper pullback, they want the 20-day EMA to act as support.
  • The bears see the current move as a large 2-legged bull leg and a buy vacuum test of the trading range high.
  • They want a failed breakout followed by a retest of the middle of the trading range.
  • They see the last 5 trading days forming a small triangle. They hope that it will be the final flag of the move.
  • They want a reversal from a wedge pattern (Mar 18, Apr 3, and Apr 11).
  • They need to create strong consecutive bear bars to show that they are back in control.
  • The move up since the February 28 low has been strong, with big consecutive bull bars and relatively small pullbacks.
  • The move could still be a bull leg and a buy vacuum within the trading range.
  • Markets have inertia and odds slightly favor the trading range to continue.
  • However, if the bulls can create sustained follow-through buying in the next few weeks, the odds of a successful breakout and a measured move will increase.
  • The move up has been strong enough for traders to expect at least a small sideways to up leg to retest the current leg extreme high (now Apr 11 high).
  • For now, the market may still be in the sideways to up phase.
  • Traders will see if the bulls can create more follow-through buying above the trading range.
  • Or will the market stall and form a pullback into the trading range instead?

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